Monday, September 08, 2014

Biofuel Startups Need Attention

Biofuel gets a bad rap for being more costly than petroleum and less efficient.  The science behind biofuel is inconclusive only if it doesn't account for costly inputs like fertilizer.  Ammonium nitrate in fertilizer adds energy inputs to biofuel feedstock crops that make the biofuel a net energy sink.  Exchanging those inputs for smart agriculture makes biofuel more competitive.  Startups in this space have options worth pursuing before they go to market with an inefficient solution.

Energi's insurance products are designed for the energy sector.  I do not know whether their policies offer discounts for brokers or producers who incorporate biofuel into fuel cycles.  It's worth a look if insuring a biofuel feedstock takes some risk out of crop failures.  Project finance for biofuel might be more difficult.  Joule Assets finances efficiency projects, and I believe a comparable model could cover biofuel projects tied to facilities like grid sector fuel cells (yes, such things are more than just drawing board dreams).

The Joint BioEnergy Institute (JBEI) underwrites some tech development with help from major labs.  The whole DOE Bioenergy Research Center effort touts the numerical output of patents filed but I don't readily see numbers for commercialized success stories.  If biofuel incubation is another process-oriented bureaucratic runaround it will turn off results-oriented entrepreneurs.  I hope these centers implement the NSF Innovation Corps standards or they'll have a hard time getting respect from VCs.  Meanwhile, someone with less patience could take a biofuel idea from the US DOE Algae Testbed Public-Private Partnership (ATP3) and run it through the Carbon War Room to see if anyone in the ecosystem endorses it.

The phrase "attention capital" is not so new.  It dates to design articles from the last decade and beyond.  The important thing is that startups draw attention to themselves early enough to gather buzz.  Leveraging the biofuel ecosystem is one way for startups to get that buzz.